Pakistani investigators find head at bomb site

ISLAMABAD (Reuters) - Pakistani investigators scouring thescene of a weekend suicide bomb attack on police found asevered head on Monday as the leader of the ruling party saidhis government would do everything to stop the bombers.

The toll from Sunday's attack on police, who had beenguarding Islamists marking the anniversary of an army commandoraid on Islamabad's Red Mosque, rose to 16 as one of the nearly50 wounded died, police said.

The attack has raised questions about the new government'spolicy of trying to end militant violence through negotiationsand will increase concern about prospects for the country, anuclear-armed U.S. ally making a transition to civilian rule.

The government is led by the Pakistan People's Party (PPP)of former Prime Minister Benazir Bhutto, who was killed in asuicide attack in Rawalpindi on December 27.

Bhutto's widower, Asif Ali Zardari, who took over as leaderof the party after his wife's murder, said in a statement thosebehind Sunday's "despicable" attack were trying to createchaos.

"Pakistan People's Party realises the grave threat thatsuch terrorist activities pose to the country and the PPPgovernment will do everything possible to check the activitiesof such elements and those responsible will be brought tojustice," he said.

President Pervez Musharraf, whose power has withered sincehis allies were defeated in a February election and who hasbeen facing calls to step down, warned on Friday that moreradical mosques would emerge if extremism and militancy werenot tackled.

The former army chief who took power in a 1999 coup ruledout resigning, saying he was needed to help politicians avoidan economic meltdown and tackle the militant threat.

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Investigators at the site discovered a severed head inbushes beside the road where the attack took place, a Reutersphotographer said, but police declined to comment on the grislyfind.

The heads of suicide bombers are often severed by theexplosives strapped to their torsos and can provide vitalclues.

Police investigator Falak Sher said an estimated 5 kg (11lb) of explosives had been used in the attack. No suspects hadbeen detained, he said.

The blast happened several hundred metres (yards) fromcity-centre Red Mosque mosque, shortly after a tightly guardedmeeting of Islamists there had ended.

Several thousand Islamists, including members of bannedgroups, had listened to fiery speeches to mark the firstanniversary of the army raid on the complex.

More than 100 people were killed when commandos stormed theRed Mosque complex, which included a madrasa or Islamicseminary, on July 10 last year, after a week-long siege thatbegan when gunmen from the mosque clashed with police outside.

A couple of weeks after the siege, 13 people, most of thempolicemen, were killed in a suicide bomb attack on police atthe opposite end of the same road as Sunday's attack.

Sunday's attack had added to worry among stock investorswhose confidence had already been sapped by politicalsquabbling, insecurity and economic problems, includinginflation running at more than 20 percent.

Stocks have been sliding and the rupee setting new lowsagainst the dollar.

The Karachi Stock Exchange 100-share index was 0.7 percentlower in the afternoon.

"Already there's no interest in the market. If anything, itmay have added to the negative sentiment," said Shuja Rizvi,director of broking operations at Capital One Equities Ltd.

The rupee weakened to a record low of 71.00/05 to thedollar, with the blast having no direct impact on trade butfeeding into a general air of gloom, dealers said.

(Additional reporting by Saher Ahmed; Writing by RobertBirsel; Editing by David Fox)